“I guess this is just another step to get more deeply involved in Sudbury. They like the potential,” said Alar Soever, president of Wallbridge.
“I can’t speak for them, but I think we were undervalued (at the time we were bought), and they saw an opportunity to increase their stake in Sudbury by acquiring a percentage of us.”
Lonmin has already had some luck in the search for platinum in Sudbury. In January, as part of its joint venture with CVRD Inco, the company announced significant discoveries of platinum group metals on both the Capre and Denison properties.
With platinum prices sitting at nearly US $1,300 per ounce, the find could be lucrative for Lonmin. Platinum is used in jewellery, in catalytic converters for cars and in oil refineries.
Lonmin’s discoveries in January gave it “a very good appreciation for the potential that’s out there, hence their interest in us,” said Soever.
Lonmin owns four platinum mines in South Africa, where the majority of the world’s platinum reserves are located.
As part of the deal, Lonmin will have the option to acquire an interest in and enter into joint ventures on Wallbridge’s north range properties.
In addition, Lonmin has been granted a first right of refusal on all of Wallbridge’s properties within the Sudbury area for the next five years, subject to any existing agreements with other parties.
Sixty per cent of Lonmin’s investment has to be used to advance exploration of Wallbridge’s north range properties.
Soever said the deal is good for Wallbridge. “It certainly gives us a good amount of financing and a good partner to explore a large amount of land.”
Founded in 2000, Wallbridge has been searching for platinum on 37 properties covering 680 square kilometres on the footwall of the Sudbury Basin. The 2007 exploration budget is in excess of $6 million.
The company has already made some smaller discoveries of platinum, but does not yet have any mines in production. Recent exploration successes include a new nickel-sulphide discovery on the Frost Lake Property and the low sulphide platinum group discovery on Amy Lake.
The Skynner Lake Property is along the same trend of mineralization found at Frost Lake. A future opportunity for resource development exists on the Broken Hammer and Parkin properties.
Soever said the footwall of the Sudbury Basin was ignored until the early 1970s, when platinum group metals were discovered there.
“Since that time, people have started to recognize that with the nickel and copper that’s along the contact of the Sudbury igneous complex, there’s been a separation of some of the copper and platinum group elements, and these have migrated out quite far into the footwall.”
There aren’t a lot of sources of platinum in the world, so the discoveries in Sudbury are extremely significant, said Soever. Sudbury ore also has a higher than average concentration of platinum, he said.
“Most times when you have platinum group deposits, there’s more palladium than platinum. In Sudbury, there’s slightly more palladium than platinum, but it’s very close to a 1:1 ratio. Sudbury is one of the few places to be if you’re really focused on platinum.”